What Is Contingent Workforce Management (CWM)?

Contingent workforce management, post the pandemic, moved from margins to the mainstream. As a result, the existing workforce management solutions were tweaked to accommodate contingent workers too. However, this approach is fraught with challenges in labor and wage compliance, team cohesion and business continuity.

Today, organizations need new solutions that are tailored to the specific challenges around contingent workers. Specifically solutions that enable organizations to unite their entire workforce, both permanent and contingent workers, in the service of achieving their business goals.

Contingent Workforce Management is the management of a contingent workforce, which comprises workers who provide their services to an organization on a provisional, non-permanent basis. All the same, they still constitute a part of the organization’s workforce.

However, they bring many challenges to the organization in terms of labor and wage compliance, misclassification, and security, among others. Therefore, organizations must manage the workforce in a way to overcome these and other challenges and have a software solution in place for the same.

To this end, a typical contingent workforce management solution must, at the least, include:

Better Scalability

An increasing number of organizations are looking at contingent workers for flexibility in the way they operate. In the fast-changing work landscape, contingent workers offer the ability to scale the teams in line with the project’s progress. Properly managing a contingent workforce empowers organizations to better adapt to changing market conditions.

Easier and Faster Recruitment

Since the skills required are changing rapidly too, organizations are well-served by a ready-to-leverage contingent workforce. Also, since finding and recruiting these workers is easier and faster, more organizations will likely adopt this approach.

Market-ready Teams

Lastly, contingent workers possess more market-attuned skills and, therefore, need less training and development programs. Managing them properly can support organizations in nimbly navigating the changing business landscape with confidence.

Navigating Uncertainty

Moreover, from an organizational standpoint, there are uncertainties regarding the requirements of particular resources. Engaging full-time employees requires more expenses and effort. It’s also a costlier proposition if the requirement later turns out to be temporary. Engaging contingent workers and properly managing them affords the flexibility to understand the extent of a job’s long-term requirements and absorb such people into the organization full-time, if needed. Alongside this, businesses can optimize the workforce cost as well.

So, both from the employee and organizational perspective, the concept of a contingent workforce and proper contingent workforce management is a win-win and big business advantage.

If the current trends are any indication, contingent workers may soon constitute up to 50% of an organization’s workforce. This brings a new range of challenges in managing them.

Therefore, every organization must invest in solutions that offer the ability to search, shortlist, hire, and manage contingent workers across projects, time zones and geographies. Further, this calls for an integrated approach to managing the entire gamut of the workforce, both permanent and contingent.

While contingent workers offer a wide set of advantages, managing them also comes with a string of challenges. The consequences of overlooking these challenges can prove costly.

That’s why, the software solution to manage a contingent workforce must be tailored to facilitate the following:

Data Security

Both total or zero access to company information are detrimental to contingent workers’ productivity. Therefore, they must have need-to-know access to company information. Also, their devices must be updated with the latest security software to prevent security lapses. The solution needs to have both these provisions.

Wage and Labor Compliance

Worker misclassification can attract severe risks which can impact contingent workforce management. Falling short of compliance with the latest labor laws and regulations can result in severe consequences like fines, penalties and lawsuits. The solution must empower the organizations to keep up-to-date with all applicable laws and regulations.

Real-time Resource Visibility and Allocation

A fragmented view of the company’s workforce adversely affects the ability to plan for current projects and bid for new projects. The solution must provide real-time visibility into the organization’s entire workforce (including permanent and contingent workers). It must facilitate managers in checking the workers’ availability, current status, and skills-fit for upcoming projects.

Track and Enhance Performance

Organizations must have the ability to continuously track workers’ performance. It helps them reward the high-performing workers and give the requisite feedback to those who need to pick up. Further, the organization must put in place programs that help workers to upskill or reskill for future projects.

As more organizations look at exploring contingent workforce as an additional opportunity, it’s important to consider a software solution for its management. Because even contingent workers come under the purview of labor laws and regulations.

You need to ensure you’re not exposing your organization to any compliance risks. You must enable your organization to adhere to all the applicable laws and regulations. You must find options that are capable of enforcing continuous compliance for your contingent and regular workforce.

Let’s explore the 4 options available to organizations to manage their contingent workforce.

Outsourcing

Organizations can employ a third-party staffing solutions provider to execute certain tasks at a predetermined cost for a fixed period of time. The workers engaged for such deliverables are on the staffing provider’s payroll. The organization can enter into a contract with the staffing provider. A key part of the contract will be the Statement of Work (SoW), which defines the role, responsibilities, pay, deliverables, and other relevant conditions.

Off-the-shelf Vendor Management System

Many software development companies provide off-the-shelf systems for managing vendors. These systems operate well for general, well-recognized contingent workforce management needs. Of course, how well they operate depends on your data quality and operational processes. However, should your business be unique, it might be inadequate to serve your needs.

Managed Service

In this model, you hand over the entire management of the contingent workforce, including the vendor management system, to a service provider. Typically, the managed service providers are well-versed in their domains, and possess vast experience and expertise. Therefore, they are well-equipped to provide you with a superior quality of compliance and service.

Customized Solution

In contrast to off-the-shelf solutions, many companies provide solutions that are tailored to your specific business needs. They have the money to assess your business in depth and customize a contingent workforce management solution to cater to your unique needs. However, this requires a company with both development experience and domain expertise.

As the number of organizations that engage contingent workforce continues to rise, the need for well-executed contingent workforce management and a solution for the same has never been more urgent.

However, organizations must resist the temptation to adopt just any solution in the marketplace. They need to analyze their internal conditions, market environment, and competition to better grasp their current state.

The solution must serve the specific business needs of the organization. Significantly, the solution must preempt the business and compliance risks that can come their way. Lastly, organizations must choose a solution that’s tailored to their current and future needs.